Best payroll software for small businesses

2025 brings a number of big payroll changes. Employer National Insurance Contributions (NICs) have risen since April, alongside changes to employee benefits – so the new complexity of payroll calculations will call for capable HR and payroll software to maintain compliance.

Our expert researchers have analysed the top payroll software on the market and ranked their favourites, which we review below. Staffology by IRIS is our number one payroll software, as it’s an affordable, all-in-one solution. But there are other options that might be more suitable for you:

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FEATURED PROVIDER	BEST ALL ROUND
Provider QuickBooks	Provider Staffology by IRIS	Provider Sage Payroll	Provider Xero	Provider Moorepay
Cost £1.60-£4.70/mo base accounting software plans* + 0.50-£1/mo for payroll features *For the first six months	Cost 1 to 19 payslips: £39 + VAT per month. 20 to 50 payslips: £39 + VAT, plus £1.95 + VAT per payslip, per month. 51 to 10K+ payslips: bespoke quote.	Cost Payroll Essentials: £10 per month Payroll Standard: £20 per month Payroll Premium: £30 per month (Each plan covers five employees)	Cost From £16 per month for the base software (payroll is £1.50 per person)	Cost Provides personalised quotes after assessing business needs
HMRC compliant	HMRC compliant	HMRC compliant	HMRC compliant	HMRC compliant

Optimise your business with Quickbooks' all-in-one payroll solution Try Quickbooks

Below, we’ll guide you through the best platforms for SMEs, as identified by our research team, to find the best one for your unique needs. Or, to save time, fill in our simple 🔍cost comparison tool to find quotes tailored to your business operations in one minute.

1. Staffology by IRIS: best overall payroll software

Staffology by IRIS

• Starting price from: £39 + VAT per month
• Free trial: You can book a demo of the software

• Fully CIS supported
• Advanced API that can integrate with a range of software including Xero and QuickBooks
• Customisable payslips to fit in with your companies branding

Summary IRIS is one of the UK’s longest-running private software companies. It’s been supplying administration solutions to the country’s businesses, charities, and public sector for over 40 years – implementing many user-centric features that simplify the payroll process.

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Why is Staffology a top choice for payroll software?

Staffology by IRIS is an online payroll solution that’s user-friendly, affordable, and a great all-in-one solution for SMEs. It keeps all of your company payroll data securely in a centralised location for ease of access, and it offers full support for managing and paying subcontractors under the Construction Industry Scheme (CIS) regime.

Staffology’s Auto Pilot feature automates repetitive payroll tasks, saving time and reducing errors. It can finalise pay runs, distribute payslips, file HMRC submissions, and generate payment summaries. Handily, it also instantly responds to any mid-year legislation changes, and for any surprise updates to employment law, it will release coding notices.

Staffology’s dashboard view displaying the process of calculating and distributing employee wages and salaries for a specific pay period, known as a pay run – Image source: Staffology.co.uk

In terms of more practical considerations, the software integrates with HMRC, so online submissions are accurate all year round. RTI reporting and auto-enrolment are included, so compliance is no issue either. You can also brand the software with your own company logo, and create custom payslips, to establish strong brand authority.

Are there any limitations?

Unlike some other providers, such as Moorepay, that just charge a flat rate, Staffology charges per number of payslips generated per month, in addition to the flat fee. So that’s not such great news for firms that pay staff weekly (such as hospitality) as they will end up more costly more than those that pay monthly.

How much does it cost?

As we highlighted above, the amount you’ll pay will depend on the number of payslips you’re processing per month.

• For 1 to 19 payslips you pay a flat fee of £39 + VAT per month.
• For 20 to 50 payslips you pay the flat £39 + VAT fee, as well an additional £1.95 + VAT per payslip, per month.
• For 51 to 10K+ payslips Staffology will provide you with a bespoke quote.

Just one word of warning, our previous research has shown us that prices have been known to increase. You’ll need to sign up to a 12 month contract to secure a fixed rate.

2. Sage: a dedicated accounting resource for small teams with up to five employees

Sage Payroll

• Starting price from: £10 per month + VAT
• Free trial: 30 days

• Sage Copilot provides AI-powered assistance
• Simple pay run in four steps
• Includes core HR capabilities

Summary Based in Newcastle upon Tyne, as of 2017 Sage is the UK’s second largest technology company, the largest supplier to small businesses, and has 6.1 million worldwide customers.

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Why is Sage a top choice for payroll software?

Sage Payroll is an excellent choice for startups or micro-businesses that are just getting off the ground and want a system to play the role of HR manager, accountant, and payroll specialist. This is because Sage provides an all-in-one-solution that can provide accounting, HR and payroll as part of its suite of business management products.

The app also provides a very in-depth reporting function. You’ll be able to produce monthly, quarterly, and annual financial reports such as balance sheets, income statements, and cash flow statements. Sage has also recently introduced Sage Copilot, its AI-powered assistant.

Sage Payroll offers the ability to update employee personal information, such as address, phone number, and emergency contacts – Image source: sage.com

Sage’s more sophisticated capabilities mean it can generate comparative financial statements between two different time periods. Users have an exact understanding of where their cash flow has improved/worsened and can take decisive action based on up-to-date and accurate information.

Are there any limitations?

During our research, we found that some customers reported that Sage is time-consuming to set up. So while it might be a good solution for smaller teams, we wouldn’t necessarily recommend it to those who have never used payroll software before. Staffology might be a better bet for new payroll users, as it’s slightly less complex than Sage.

How much does it cost?

Rather than billing per payslip, like Staffology does, Sage Payroll pricing is based on team size. It is available over three plans:

• Payroll Essentials (£10 per month for five employees plus £2 per each additional employee)
• Payroll Standard (£20 per month for five employees plus £4 per each additional employee)
• Payroll Premium (£30 per month for five employees plus £6 per each additional employee)

Sage’s employee limit of just five employees per plan might seem expensive compared to other options on this list. However, you should remember that each plan also boasts a number of core HR features, although it’s quite a bit more basic than specialist HR software.

Read more: our full review of Sage Business Cloud.

3. Xero: best option for paying staff on a weekly basis, such as hospitality businesses

Xero

• Starting price from: £16 per month for the base software (payroll is £1.50 per person)
• Free trial: 30 days

• Xero Me mobile app – employees can enter timesheets and request leave remotely
• Automates all pay and pension calculations
• Seamlessly pairs with Xero’s accounting software

Summary Based in New Zealand, Xero was founded in 2006 and now boasts 4.2 million subscribers. Xero is tailored mostly towards experienced professionals and accountants.

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Why is Xero a top choice for payroll software?

The best thing about Xero is being able to manage your payroll and accounting seamlessly in one system, saving you time and resources. And because it bills per person, not per payslip, it may be a more cost effective option for those who pay their employees on a weekly schedule, such as hospitality businesses.

In terms of bookkeeping, Xero has a number of excellent automations to make payroll processing as simple as possible. The software automates tax, pay, and even leave calculations, letting you focus on other admin tasks. You can also reduce payroll admin and save time by giving your employees limited access via the Xero Me mobile app (or the web). They can even enter timesheets and request leave remotely.

Xero payslips are designed to be clear and easy to understand, providing employees with a detailed breakdown of their earnings and deductions for a specific pay period – Image source: Xero.com

Firms with lots of employees coming and going (like hospitality) also don’t need to worry about getting bogged down with pension re-enrolment – an area which we know small businesses can waste a lot of time on. Xero’s pension re-enrolment workflow makes managing your cyclical pension duties fast and simple.

Are there any limitations?

Xero doesn’t provide any support via telephone. This lack of support could potentially be an issue for new users. In which case we would recommend the more extensive support provided by QuickBooks instead.

How much does it cost?

There are three plans:

• Xero Ignite (£16 per month) payroll is £1.50 per employee 
  
• Xero Grow (£33 per month) offers payroll for one employee (£1.50 per additional employee)
• Xero Comprehensive (£47 per month) offers payroll for five employees (£1.50 per additional employee)
• Xero Ultimate (£59 per month) offers payroll for 10 employees ((£1 per additional employee)

It might seem expensive, but remember this is an accounting platform with payroll features. You’ll really be paying to carry out accounting tasks, such as cash forecasts and settling invoices. It’s also worth knowing that you can get six months at 90% off until June 30th.

4. Moorepay: peace of mind with impressive security features

Moorepay

• Price from Quote-based
• Free trial? You can request a free demonstration

• Switching from your old provider or in-house payroll is easy
• HMRC recognised and accredited by the CIPP’s Payroll Assurance Scheme
• Data is stored securely in UK IBM data centres

Summary Moorepay is a powerful payroll provider that has been designed with medium sized businesses in mind. Its feature list is impressive, as are its data storage capabilities.

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Why is Moorepay a top choice for payroll software?

Moorepay’s security features are very impressive: data is stored securely in UK IBM data centres with the latest Microsoft Azure cyber secure technology, removing any risk to business continuity. It also provides single sign-on, biometric login capability and privacy features.

Plus, like with Xero, the Moorepay mobile app gives employees easy access to their payslips and P60s, and lets them view their employee benefits – so you’ll get less queries, and have more time. Moorepay is HMRC compliant and BACS approved (permitted to send faster payment transactions on behalf of third party organisations). Plus, we like how easy it is for you to switch payroll providers as Moorepay’s customer support team makes this a painless process to complete.

Moorepay’s customisable dashboard can show you everything from employee information to a calendar view of upcoming and past pay runs – Image source: moorepay.com

With plenty of employee management tools at your disposal, your workforce will be kept happy, updated, and importantly, paid on time. Moorepay is a payroll-cum-employee management tool. It handles a wide range of HR duties like real-time, insightful dashboards and data-driven graphs, and is considerably cheaper than forking out for expensive HR outsourcing fees.

Are there any limitations?

While it caters to medium-sized business, it’s less suited to microbusinesses or large, international operations. This is because the cost of the service will outweigh the benefits for companies with fewer than 30 employees (or for global businesses with multiple locations).

How much does it cost?

Moorepay doesn’t provide public pricing, instead it will provide you with a bespoke quote. This opaque pricing model could be an issue for newer businesses that are just getting started, and might prefer a more straightforward pricing model like Sage.

5. QuickBooks: a solid option for solopreneurs

QuickBooks

• Starting price from: £5 (in addition to the base software)
• Free trial: 30 days

• Automatic tax calculations
• Employees can access payslips via dedicated portal
• Submit RTI to HMRC with each payroll

Summary Part of the American multinational company Intuit Inc, QuickBooks is accounting software that’s specifically designed for SMEs. It currently has 6.5 million subscribers worldwide. QuickBooks is also a big player in the world of small business payroll software, with some great features that are relied upon by small firms across the UK.

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Why is QuickBooks a top choice for payroll software?

If you’re  a sole trader, or limited company, and you’re looking for easy-to-use, functional, and aesthetically pleasing payroll software, then QuickBooks could be a top option for you. Its HMRC-compliant software does all your calculations for you and updates tax codes automatically, so you can simply submit your figures in a couple of clicks.

QuickBooks positions itself towards sole traders with a set of specialist self-employed features. Feel assured you’re paying yourself correctly with Directors National Insurance contributions (NICs) calculations and Automatic Real Time Information (RTI) submissions to HMRC.

With QuickBooks, you can automate the process of adding new employees to save you time and reduce the risk of errors – Image source: QuickBooks

That doesn’t mean you can’t hire any other staff. The self-service employee portal has similar functionality to other software providers like Xero, enabling your employee to enter their address, access payslips, enter timesheets, request leave and even submit expenses.

Are there any limitations?

Much like Xero, the payroll functionality is only available as a paid add-on to QuickBooks’ accounting software. This does increase the price compared to other platforms, especially free payroll systems. But for microbusinesses or side hustles that want to manage both their payroll duties and their accounting duties from one reliable system, then QuickBooks is a solid choice.

How much does it cost?

As we highlighted above, you’ll need to first sign-up for one of QuickBooks accounting software tiers:

• Simple Start: £16 per month (for sole traders or small businesses preparing a Self Assessment)
• Essentials: £33 per month (for small businesses working with suppliers)
• Plus: £47 per month (for businesses managing more complicated projects)
• Advanced: £115 per month (for expanding businesses that need more sophisticated tools)

Once you’ve selected an accounting software plan, you’ll be given the option to add-on either Core Payroll for £5 per month or Advanced Payroll at £10 per month.

Core Payroll is fine for sole traders and small teams that just need the basics, but Advanced will get you HR and reporting features like timesheets and automatic pension submissions.

So in total, it’s not a budget option, but it’s worth keeping in mind that QuickBooks is currently running a limited time offer where you can get 90% off for the first six months.

Payroll software: key features comparison table

Implementing your payroll software

Now you might think once you’ve decided on your payroll software of choice, all you need to do is sign up and you’re off and running. Unfortunately, it can be a little trickier than that.

It can be stressful, as staff will still be expected to be paid on time, and it can be a considerable time investment from managers. You also need to make sure you continue providing accurate reports to HMRC.

That’s why we’ve given you a rough, step-by-step guide to implementing your payroll software into your workflow.

Step 1: setting up your account

You’ll need to create your company’s profile on your chosen software. This will generally involve inputting some basic info, setting up accounts and user permissions for your staff, and getting some basic settings sorted out like currency. You should generally allow a couple of days to get this done.

Step 2: entering your employee data

You’ll need to start inputting all your employees’ personal details into the software. This will also involve setting up individual pay structures (like hourly rates), as well as tax codes and pension details. If you’re switching over from an existing software, you’ll also need to upload any historical payroll data. You should probably allow  about a week to complete this stage.

Step 3: integrating your software into your workflow

Once all the crucial data has been uploaded, and you’ve set up the basic configurations, it’s time to start thinking about integrations. Critically, you’ll need to connect your payroll software to HMRC to allow for Real Time Information (RTI) submissions.

You’ll also need to link up with your business bank account to pay your staff, set up pension auto-enrolment and connect your payroll to your HR software. Depending on how complex your workflow is, you should allow between one and two working weeks for this stage.

Step 4: testing your software

You don’t want to make any mistakes when it comes to paying your staff, or submitting critical info to HMRC. That’s why you should run some test payroll actions with dummy data before rubber hits the road. It’s also wise to compare the initial automatic calculations against manual checks, to make sure it’s working out correctly. This is also a good time to start training your staff on the software. You should allow just over two weeks for this stage.

Step 5: time to go live

If your tests are all running to plan, it’s time to go-ahead with the software. You can start running some real payroll actions, but just closely monitor them for any errors or issues. You should be running this in parallel with your old system (if you have one) before finally moving fully over to the software and shutting down the old one.

Are there any hidden fees involved?

Just keep in mind that some providers might charge additional setup fees for helping you get onboarded to the new software. On average, these can range from about £100-£400, so just make sure you’re factoring that into your budget (though they can be optional).

What about data migration?

This is an important, and complex, step when getting set up on a new payroll platform. It involves copying over a huge amount of sensitive live-data about your employees.

This includes:

• information (like NI numbers and bank details)
• Employment histories
• Tax information
• Pension details

In addition to employee information, you’ll also need to migrate across any historical payroll data and your company setup data (like pay schedules and benefit schemes).

Migration can be a risky period as it could result in the wrong bank details being entered, tax code errors and pension failures. Make sure you’ve factored in a solid amount of time and resources to your data migration needs!

Next steps

Regardless of our opinion, you should always compare the best payroll software available before signing on the dotted line. The last thing you want is to be stuck with a service that doesn’t fulfil the needs of your business, even if it’s a great product.

This is where our custom-built comparison tool comes in. We’ve partnered with some of the best payroll software providers to help you get the best service for your business, including the likes of Staffology and Moorepay.

Simply fill in a few basic details, and providers will be in touch with bespoke 🔍personalised quotes for you to compare, along with further details about why the service they offer would best suit the needs of your business.